• Assume you are working on budgeting for the room department of your hotel.
• Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2016. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year.
• Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $250,000 during 2016. For 2017, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2016.
• Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2016. For 2017, this fixed cost will increase by 2% due to the expected increase in living expenses in this area.

1. What will be the budgeted ‘Room Revenue (Sales)’ for 2017?

2. What will be the budgeted ‘Guest Supplies’ expenses for 2017?

3. What will be the budgeted ‘Salaries’ expenses for 2017?

DO NOT ANSWER IN EXCEL

1. Mangement is considering two hotel projects. Project A will be in Jamaica with an intial investment of $865,000 and Project B will be in Canada with an initial investment of $750,000

The cost of capital for Project A is 13% and the cost of capital for project B is 15%.
Calculate the following;

1. Calculate the discounted payback period of Project A
2. Calculate the discounted payback period of Project B.
3. Calculate the net present value for Project A
4. Calculate the net present value for Project B.

5. Management can only accept one project. Which project should management accept? Explain your answer

. The Green Shingle purchased a parcel of land 6 years ago for $299,500. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $28,000 a year. The Green Shingle is now considering building a hotel on the site. The current value of the land is $347,500. The firm has a mortgage secured by the property with $12,670 annual interest expenses, and would need to spend $64,000 to improve the land for construction. Which of the following is correct?

A. The purchase price of the parcel of land 6 years ago is a sunk cost for the project.
B. The current value of the land is an opportunity cost for the project.
C. The $12,670 annual interest expenses are a relevant cash flow for the project.
D. The $64,000 expense to improve the land is an irrelevant cash flow for the project.
E. A and B only.

F. A and C only.

Which of the following services should recover full cost? Why? Which of these should use block-rate or peak-period pricing? Why? For which services is partial cost pricing justified?

a. Public library

b. On-demand genealogy research services offered by public library

c. Public transportation (bus and rail)

d. Public swimming pool

e. Public water park with wave pool and slides

f. Senior citizens center

g. Space for senior citizens to exhibit and sell arts, crafts, and antiques

h. Toll bridge

i. Mosquito spraying to control West Nile virus

j. Public housing

k. Disaster shelters

l. Large item (refrigerators, sofas) disposal in landfill

m. Household hazardous-waste disposal

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 3 years ago for $4798465 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3848715. An engineer was hired to study the land at a cost of $823164, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $4984348 million to build, and the site requires $1185814 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

Orchid Biotech Company is evaluating several different development projects for experimental drugs. Although the cash flows are difficult to​ forecast, the company has come up with the following estimates of the initial capital requirements and NPVs for the projects. Given a wide variety of staffing​ needs, the company has also estimated the number of research scientists required for each development project​ (all cost values are given in millions of​ dollars). Project Number Initial Capital​ ($) Number of Research Scientists NPV​ ($) I 10 2 10.1 II 15 3 19.0 III 15 4 22.0 IV 20 3 25.0 V 30 12 60.2 a. Suppose that Orchid has a total capital budget of $ 60 million. How should it prioritize these​ projects? b. Suppose that Orchid currently has 12 research scientists and does not anticipate being able to hire more in the near future. How should Orchid prioritize these​ projects? a. Suppose that Orchid has a total capital budget of $ 60 million. How should it prioritize these​ projects? The profitability index for Project I is nothing. ​(Round to two decimal​ places.)

Propose an initial risk register for constructing a Recreational Park Project. The risk register should contain a minimum of 10 risks. * Use a template of your choice for risk register.

determine the beta for Starwood Hotel (HOT), Disney (DID), Abbott Laboratories (ABT), and Lockheed Martin (LMT). Discuss the possible reasons for the differences you observe among these companies.